Future of Card Payments

While the future of payments has been looking cashless for a while now, there are indications that it also might become card-free. But, what is the reason for this shift?

As it usually tends to go with new technologies, it’s the convenience factor. A few decades ago, cards were considered the most convenient payment method. However, with the digitalization of the world, new payment options have shown their benefits. And, one of these is contactless payment.

Nowadays, digital wallets and payment gateways allow you to make seamless contactless payments. This allows both the fund sender and the receiver to experience a more straightforward checkout process. With all of that being said, let’s discuss this new version of the future. 

Digital Wallets and Their Success


A bit more than a decade ago, Google Play was released. And, with its release started the era of the digital wallet, with many other companies following suit. Within a short span of time, we had Apple Pay, Samsung Pay, PayPal, and Cash App, to name a few. 

But, what do digital wallets owe so much success to? Well, for starters, digital wallets allow you to gain more space in your pockets. They make it possible for you to do everything from a single device by providing a software-based solution for storing information for different payment methods and websites.

And not just that. There’s also the safety factor. Advanced mobile technology also enables the benefit of better security measures. After all, many devices nowadays enable biometric identification, which allows users to configure their wallets and unlock them using their face, fingerprint, or iris. 

Now, digital wallets have another advantage – the factor of global reach. Many people, in less developed countries, are unbanked. However, a decent portion of those people has access to a mobile phone. With the majority of phones nowadays being smartphones, and digital wallet apps being readily available at the app store, digital wallets have a unique availability factor. They are available to everyone, and while many require a card, you can still use them, to varying extents without one. Additionally, with the future of cards looking uncertain, digital wallets are also bound to have a revolution in the future. And, in that revolutionalized future of contactless payments, cards will be obsolete. 

NFC Technologies and Their Impact


What is NFC technology? And, what is its role in a future without credit/debit cards? Well, firstly, NFC stands for Near Field Communication, which, as the name implies, allows devices to communicate wirelessly when brought close to one another. 

It operates in two different modes: active (devices generate their own radio field) and passive (devices utilize an external field). 

NFC is commonly utilized for contactless payments, and it allows you to pay by tapping your device against payment terminals. It is also used for device-to-device data exchange, accessing control systems, and embedding smart tags into objects for authentication and information exchange. 

NFC technology also protects data exchange between devices through short-range communication and encryption. It also enables mutual authentication, secure elements, and tokenization. This serves to prevent unauthorized access and ensure data integrity during your transactions and interactions.

With that in mind, NFC technologies are sure to play a crucial role in a cardless future. With seamless, contactless transactions, and convenience and security added into the mix, NFC technologies will surely become more prevalent in the future as well, minimizing the need for bank cards.

Where Bank Cards and Mobile Phones Collide


The truth is mobile phones, with their ability to allow you to do anything and everything, present as an obstacle to bank cards. They connect a customer to a service, when need be, and create a collision.

However, when it comes to payments both bank cards and mobile phones can have pros and cons. And, this is where their collision comes into play.

For example, bank cards have a single purpose, which comes as both a con and a pro. The reason for this is the simple fact that having an object you use exclusively for payment brings a certain level of simplicity. On the other hand, mobile phones can be used for various purposes nowadays, and one such purpose is payment. This is incredibly practical and convenient.

However, while a bank card will be able to work 24/7, as long as you have it in your pocket, a mobile phone will not. A mobile phone won’t really be of use in cases where your battery is dead or when you have no internet connection. 

With this in mind, new alternatives are now being discussed, ways to combine traditional card payments with mobile devices, in a way that keeps the advantages of both. And, this, in theory, is bound to work. After all, the end goal is to find the simplest and most effective form of payment that will work for everyone – a method that is fast, trustworthy, and traceable. 

Biometric Payments


So, what are biometric payments, and what is their role in a cardless future? Well, we already mentioned biometric identification briefly, so let’s expand on it.

Biometric payments are payments that make use of a person’s unique physic qualities such as fingerprints, facial features, or speech patterns, to authenticate and authorize financial transactions. Their role is to replace passwords, for the sake of higher security. 

The main benefit of this type of payment technology it uses is the security factor. However, biometric payments have a large variety of advantages. 

Biometric payments are also the most convenient way of payment for in-store transactions. And they are very secure because of the unique biometric footprint used for authentication, which is of great importance for all types of transactions. 

While we’re still on the security note, it’s relevant to mention that with biometric payments you do not have to worry about fraudulent transactions on misplaced/stolen cards. Plus, you can make purchases faster after setting up an account because you will not need to wait for real card/pin mailers. 

In addition to that, due to early access to cards and transaction convenience, issuers also won’t have to worry about high operational costs for card printing and ongoing maintenance. This also ensures fewer fraudulent transactions, fewer contested claims, and higher transaction volume from customers. On the other side, acquirers will benefit from fewer fraudulent transactions, fewer challenged claims, and increased transaction volume.

However, biometric payments do need to rely on card networks. After all, card networks will need a new option for biometric image gathering. The biometric image will need to be retrieved acquirer’s terminal and then transferred online to the issuer’s side. Afterward, the card network should process the online response appropriately after authentication from the issuer. 

A Cardless Society


Lastly, it is likely that, in the future, we will be living in a world where cards will be obsolete. Ultimately, such a result is expected with the rise of new technologies. However, what’s sure is that you won’t need to say goodbye to your card anytime soon. The actual extent and timeline of this shift is uncertain, after all. This transition will be influenced by various things, such as the rates of technological adoption, concerns regarding security, and administrative changes. 

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